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California high-speed rail commission set to award contract to group with ties to Schwarzenegger

(The following story by Shane Goldmacher appeared on the Los Angeles Times website on September 3, 2009.)

SACRAMENTO, Calif. —California's high-speed rail commission, dominated by Gov. Arnold Schwarzenegger's appointees, is set to award a $9-million contract today to a company led by the governor's top political advisor and his former campaign manager.

The three commission staff members charged with recommending a public relations firm have advised the board to give the contract to Mercury Public Affairs at its meeting today. Schwarzenegger strategist Adam Mendelsohn is a partner at Mercury, as is Steve Schmidt, who managed the governor's 2006 reelection effort.

Two members of the staff panel are former Mendelsohn colleagues.

Ethics watchdogs raised questions about the appearance of favoritism.

"You can't help but raise your eyebrows," said Kathay Feng, executive director of California Common Cause.

"We are seeing a revolving door of legislators and former state officials and state employees going from public service to private PR firms . . . and pulling on all the personal relationships that they've developed to build up their business."

One member of the staff panel, Jeffrey Barker, previously served as associate and deputy communications director in the governor's office, working daily with Mendelsohn. Barker also worked with Schmidt.

A second panel member, Michael Bowman, also has ties to Mendelsohn and the Schwarzenegger administration. Bowman was deputy secretary for communications of Schwarzenegger's Business, Transportation and Housing Agency, and Mendelsohn served as the governor's communications director.

Barker, now deputy director of the California High Speed Rail Authority, said the panel followed a "regimented process" and that there was no conflict of interest.

"We evaluated these proposals based strictly on communications and outreach abilities," he said.

Barker said he and Bowman "knew members of every single [public-relations] team that came in," not just those at Mercury. He did not consider recusing himself, he said.

Mendelsohn said there was "absolutely not" a conflict.

"We have full confidence that the extensive campaign plan that we developed was superior to any other plans put before the committee," he said.

Mendelsohn cited Mercury's "issue expertise," noting that Tracy Arnold, who previously served as Schwarzenegger's high-speed rail point person, is on the company's staff.

California voters approved a nearly $10-billion bond last November to begin building a high-speed rail network connecting Southern California to the Bay Area and Sacramento.

The contract runs through June 2014. The $9-million public relations effort is needed, Barker said, because "up to this point there hasn't been enough outreach, and the public doesn't have the information about this project that they demand and deserve."

Four of the nine commissioners who will vote on the contract today were appointed by Schwarzenegger; a fifth continues to serve at his pleasure. An additional rail board member, Tom Umberg, was appointed by former Assembly Speaker Fabian Nuñez (D-Los Angeles). Nuñez is also a partner in Mercury Public Affairs.

Thursday, September 3, 2009

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